New Social Security plan ready for vote

Published: Sunday, February 20, 2000

WASHINGTON {AP} Social Security beneficiaries, now losing billions of dollars in benefits, shouldn't be penalized for staying on the job after turning 65, the chairman of a House panel that oversees the national retirement plan said Saturday.

The House could vote as early as March 2 on a GOP plan to repeal Social Security's "earnings penalty" for working Americans 65 to 69, Rep. Clay Shaw, R-Fla., said in the weekly Republican radio address.

Passage could mean bigger benefit checks for older employees who stay on the job after they pass retirement age.

The legislation would erase a rule requiring the government to deduct $1 in Social Security benefits from every $3 over a prescribed limit earned by beneficiaries up to age 70. The limit is currently $17,000 a year. President Clinton said last Monday he would sign the bill if passed.

"Millions of older Americans know exactly what the Social Security earnings penalty is, because they have lost literally billions of dollars in benefits because of it," said Shaw, chairman of the House Ways and Means subcommittee on Social Security.

"What's worse, millions more soon-to-be seniors in the baby boom generation could be hit by this work penalty if we don't change the law now," he said.

Shaw described the plight of a 66-year-old Florida constituent who received about $5,000 a year in Social Security benefits. If the woman, identified only as Janet, took a part-time job as a grocery store cashier, she could earn $18,500.

Because that is $1,500 over the current earnings limit, Janet would lose one-third of that amount, or $500, in Social Security payments, Shaw said.